While the economy continues to grow slowly, and employment numbers are mixed, neither party has a plan to speed up job growth. The Obama administration is offering a package of reforms to business regulations that they say will save American businesses billions, but this will take years, and the problem with this economic recovery is not that businesses don’t have the money to hire.
The amount of money that businesses are holding is higher than it has ever been, and Republicans would like to see that go even higher. Their own ineffective plan is to cut the top income tax rate for the wealthy and the corporate income tax. But again, the problem with the economic recovery we are in now is not that businesses don’t have money to hire.
If a business is so busy that it cannot meet the demand of its customers, they are likely to have the money to hire people to meet that demand. Businesses are not charities. They do not hire people simply because they can… they hire because they think they will be able to make more money by hiring more people.
For the economy to grow faster, there needs to be more sustained demand from consumers in the lower and middle classes. Our economy is almost entirely consumer-driven, and when businesses see data like how first-time unemployment claims went up a small amount this week, when they were expected to drop, they don’t have a reason to think that they will need to hire more workers to meet future demand.
The economy is growing. The good news is that more jobs were created in the last year than any of last few, but at this pace, it will take several years for unemployment to get back to the level it was at before the housing bubble burst and the recession hit.
So far, both parties have plenty of reasons to give the American people about why all the economic problems are the fault of the other party and have ideas for adding more money to the national debt to stimulate short-term growth. But neither have proposed any ideas that promise to deliver the long-term job growth that the country needs.